Nicole Gelinas: Twenty-First-Century Reaganomics
[Nicole Gelinas, a City Journal contributing editor and the Searle Freedom Trust Fellow at the Manhattan Institute, is a Chartered Financial Analyst and the author of After the Fall: Saving Capitalism from Wall Street—and Washington.]
The president took the oath of office facing an “economic Dunkirk,” as his top advisors warned. The unemployment rate was 7.5 percent, up from 5.6 percent 18 months earlier. In his inaugural address, the president acknowledged that America was “confronted with an economic affliction of great proportions,” and he resolved to “begin an era of national renewal.” The job would take time, he said: “The economic ills we suffer have come upon us over several decades. They will not go away in days, weeks, or months.” But more than a year later, Americans were still waiting. Critics, including some from his own party, complained “all over the airwaves with proposals which are impossible to realize,” the president wrote privately. Unemployment rose to double digits, hitting 10.8 percent on the eve of the president’s second anniversary in office. Midterm election returns—a referendum on his first two years—were disastrous. Time reported that the president’s “economic advisers have been emptying out their desks and leaving,” underscoring “an impression of disarray within the Administration’s top economic ranks.”
President Barack Obama in early 2011? Nope: President Ronald Reagan in late 1982. Yet two years later, Reagan won reelection in a landslide. The famous Reagan campaign ad that proclaimed a “Morning in America” could trumpet a powerful new statistic: “Today, more men and women will go to work than ever before in our country’s history.” Unemployment was still at 7.2 percent, but it was falling. “Why would we ever want to return to where we were less than four short years ago?” the ad asked. The theme was a winner because the question was so obviously rhetorical. During Reagan’s second term, unemployment would bottom out at 5.3 percent.
Three decades after leading the nation out of malaise, Reagan can lead once again, this time through the example of the four pillars of his original campaign—taming inflation, cutting taxes, spending government money on the right things (in his case, defense), and balancing the budget. The Gipper didn’t achieve all those goals, and President Obama and Congress would need to adapt his example to a different time, of course. In fact, Obama’s job may be tougher, as history shows that recovery from a burst credit bubble is harder than recovery from other kinds of recession. But the mission is the same: economic growth. And the principle behind the four pillars also remains the same: government shouldn’t compound crisis-induced economic uncertainty by adding more uncertainty....
Read entire article at City Journal
The president took the oath of office facing an “economic Dunkirk,” as his top advisors warned. The unemployment rate was 7.5 percent, up from 5.6 percent 18 months earlier. In his inaugural address, the president acknowledged that America was “confronted with an economic affliction of great proportions,” and he resolved to “begin an era of national renewal.” The job would take time, he said: “The economic ills we suffer have come upon us over several decades. They will not go away in days, weeks, or months.” But more than a year later, Americans were still waiting. Critics, including some from his own party, complained “all over the airwaves with proposals which are impossible to realize,” the president wrote privately. Unemployment rose to double digits, hitting 10.8 percent on the eve of the president’s second anniversary in office. Midterm election returns—a referendum on his first two years—were disastrous. Time reported that the president’s “economic advisers have been emptying out their desks and leaving,” underscoring “an impression of disarray within the Administration’s top economic ranks.”
President Barack Obama in early 2011? Nope: President Ronald Reagan in late 1982. Yet two years later, Reagan won reelection in a landslide. The famous Reagan campaign ad that proclaimed a “Morning in America” could trumpet a powerful new statistic: “Today, more men and women will go to work than ever before in our country’s history.” Unemployment was still at 7.2 percent, but it was falling. “Why would we ever want to return to where we were less than four short years ago?” the ad asked. The theme was a winner because the question was so obviously rhetorical. During Reagan’s second term, unemployment would bottom out at 5.3 percent.
Three decades after leading the nation out of malaise, Reagan can lead once again, this time through the example of the four pillars of his original campaign—taming inflation, cutting taxes, spending government money on the right things (in his case, defense), and balancing the budget. The Gipper didn’t achieve all those goals, and President Obama and Congress would need to adapt his example to a different time, of course. In fact, Obama’s job may be tougher, as history shows that recovery from a burst credit bubble is harder than recovery from other kinds of recession. But the mission is the same: economic growth. And the principle behind the four pillars also remains the same: government shouldn’t compound crisis-induced economic uncertainty by adding more uncertainty....